Carbon market for added income

Many farmers and timber land owners are realizing extra income from carbon payments, and many more might benefit from participation in the Cap and Trade Carbon Market, particularly if prices rise significantly along with worldwide efforts to combat climate change/global warming.

“Mississippi forest land owners are already getting several million dollars per year in carbon payments,” says Randy Rousseau, associate Extension and research professor at the Mississippi State University Forest and Wildlife Research Center.

“The nice thing is that it’s money that comes in every year — you don’t have to wait until trees reach thinning age or saw timber age. While the trees are growing, you can have money coming in from carbon payments.

“A lot of Mid-South farmers have trees, too, or land that would be suited to trees, so this provides a good opportunity for synergy between agriculture and tree farming.”

And Rousseau says, although prices on carbon contracts are fairly low at present, there is potential for them to increase as power plants and heavy industries need to offset their generation of carbon dioxide through sequestration programs.

“As carbon payment values increase, we could well reach a point where that income would be equal to or greater than the value of the timber.”

Rousseau chaired a recent workshop on carbon trading, which was televised to Extension offices in several counties in Mississippi and Alabama. More than 700 people signed up for the event, indicating a widespread interest in this method of generating additional income.

Forestry ranks No. 2 in agriculture income in Mississippi, following poultry/eggs, and generates more than $1 billion in revenue annually for more than 125,000 landowners.

“We think carbon is going to be an important market in the years ahead, offering mitigation opportunities for forestry,” says Jeffrey O’Hara, senior economist for the Chicago Climate Exchange.

He cited a Congressional Budget Office study projecting that carbon trading could be a $60 billion market by 2012.

Rules and requirements for participation in carbon sequestration programs are complex. The first step for anyone interested, Rousseau suggests, would be to contact an aggregator firm, which can provide advice and assistance.

Several such firms are operating in the Mid-South. A Google search for “carbon aggregator,” “carbon credits,” and “carbon offsets” will turn up names/contact info.